Goldman Sachs has released a research report indicating mixed results from Chinese IP retailers and toy companies under its coverage for the first half of 2026 and the second quarter. MNSO (09896) reported softer profitability, while Bloks Group (00325) delivered stronger-than-anticipated sales figures.
The investment bank has assigned a "Buy" rating to MNSO's H-shares, establishing a target price of HK$29.3. Meanwhile, it has rated Bloks Group as "Neutral" with a target price of HK$72.4. Goldman Sachs anticipates that Chinese IP and toy demand will maintain its resilience during the second half of the year, though growth is expected to moderate due to a higher comparison base, with overseas trends showing increasing divergence.
The report highlights that MNSO's domestic sales in mainland China exceeded expectations, but weaker sales from overseas distributors and operational deleveraging have exerted downward pressure on profit margins. In contrast, Bloks Group's revenue surpassed the bank's projections by 6%, fueled by assembled model car toys and overseas sales. However, its gross margin was impacted by mold depreciation, the ramp-up of new product lines, and the growing share of products in the 9.9 yuan value segment.
Looking ahead, Goldman Sachs forecasts that Chinese IP and toy demand will remain robust in the second half, but growth will slow against a higher prior-year baseline. Overseas trends are becoming increasingly polarized: Bloks Group benefits from stronger growth visibility due to its lower market penetration, whereas MNSO is prioritizing inventory health, store productivity, and profitability over rapid expansion. Gross margin remains a key point of contention, as logistics, procurement, and product or regional mix could constrain margin improvements. Bloks Group may possess better economies of scale, yet investments in its overseas supply chain continue to serve as an offsetting factor.
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